What is a global contractor?

Global employment opens doors to talent everywhere, and with a recent survey showing that almost 80% of companies plan to allow some level of remote and hybrid work, it also brings questions about the best way to engage international workers. If you're exploring options for building a distributed team, you've likely come across the term "global contractor." Understanding what global contractors are—and how they differ from traditional employees—is essential for making informed decisions about your international hiring strategy.

This guide explains everything you need to know about global contractors: what they are, how they differ from employees, and why companies hire them. We'll also cover the practical steps for engaging contractors internationally.

Whether you're a startup exploring your first international hire or an established company optimizing your global workforce strategy, you'll find the insights you need to move forward with confidence.

What is a global contractor?

A global contractor is an independent worker who provides services to a company from a different country than where the business is based. Also called international contractors or foreign independent contractors, these professionals work remotely across borders. For example, a software engineering contractor based in Lebanon working for a tech startup in the United Kingdom is a global contractor.

Need contractor support—fast? They could be set up to work with you in minutes using Oyster for Contractors.

Global contractors vs. employees

Understanding the difference between a global contractor and an employee is key to staying compliant. While both contribute to your business, their legal relationship is fundamentally different.

Employees are fully integrated into your company. You direct their work, provide the tools they need, and manage their schedule. In return, you are responsible for their payroll taxes, social contributions, and statutory benefits like paid time off and health insurance.

Global contractors, on the other hand, operate as independent business owners. Key characteristics include:

• Work autonomy: They control how and when they complete their work

• Own tools and resources: They provide their own equipment and workspace

• Financial responsibility: They manage their own taxes and business expenses

This distinction is critical, as misclassifying an employee as a contractor can lead to significant penalties.

Why hire a global contractor?

Many companies believe that hiring contractors abroad negates the complexities around labor laws and payroll that companies face when hiring employees abroad. However, there are also many complexities around engaging with contractors in foreign countries, and companies should be aware of these risks before hiring—especially as low global employee engagement is already costing the global economy an estimated $438 billion in lost productivity.

For example, different countries have different rules around misclassifying contractors as employees. Check out our Worker Misclassification Analyzer to learn more about the various regulations around the world.

How to hire a contractor internationally

Engaging a global contractor involves a few key steps to ensure a smooth and compliant partnership. While it's simpler than hiring a full-time employee abroad, it still requires careful planning.

Here's the essential process:

• Define the work: Clearly outline scope, deliverables, and timelines

• Create compliant contracts: Use locally compliant agreements covering payment terms and IP rights

• Set up reliable payments: Establish processes for timely payments in their local currency

Each step is crucial for building a strong, professional relationship and avoiding compliance risks.

Onboarding and paying global contractors

When onboarding a global contractor, you can't just use a template contract that you use for contractors based in the same jurisdiction as your company. Instead, you need to make sure that the contract accounts for all the complexities of hiring in that location.

Paying a contractor can be a more complex process as well. Different jurisdictions have different tax rules that a local accountant or employment expert might need to navigate.

Oyster's global employment platform has dedicated contractor management tools that enable you to onboard and pay international contractors without the usual compliance headaches.

Simplify global contractor management with Oyster

Managing global contractors doesn't have to be a source of administrative headaches and compliance worries. With the right platform, you can confidently engage talent from anywhere, knowing that contracts are compliant and payments are seamless—a crucial advantage when a fully engaged workforce could represent US$9.6 trillion in productivity added to the global economy.

Oyster provides the tools to create localized contracts, pay contractors on time in their preferred currency, and manage everything from one central dashboard. By simplifying the operational complexities, you can focus on what truly matters: building a world-class global team. Ready to see how easy it can be? Start hiring globally.

FAQs

How much do global contractors typically make?

Contractor rates vary widely based on industry, skill level, experience, and location. These rates reflect their expertise and local market demand for their services.

What's the difference between contractor rates in different countries?

Contractor rates differ by country due to local market conditions, cost of living, and currency values. Always benchmark against local standards to make competitive offers.

How do I ensure proper contractor classification internationally?

Focus on autonomy and control—true contractors manage their own work, equipment, and aren't economically dependent on one client. Use compliance platforms or consult local legal experts to ensure proper classification.

Disclaimer: This article and all information in it is provided for general informational purposes only. It does not, and is not intended to, constitute legal or tax advice. You should consult with a qualified legal or tax professional for advice regarding any legal or tax matter and prior to acting (or refraining from acting) on the basis of any information provided on this website.